There is a very important distinction here. Apple did NOT ask the publishers to set a price for other stores nor did they make a demand that they never sell it for less, the ONLY thing they asked was permission to match any price that undercut the agreed upon agency price. This very clearly puts the responsibility on the publishers as to what terms and conditions they decide to offer other retailers. This is a clearcut case of the publishers being at fault, but Apple negotiating in good faith and within the law.

That's the way I see it.

I expect the result of this suit will be Apple getting control over eBook prices. How will ever they survive having more control than they have now?¡

This bot has been removed from circulation due to a malfunctioning morality chip.

Many musicians and record labels were against iTunes selling single songs at $0.99.
They wanted a minimum of $1.29
And from an artistic effort, one song did not an album make; the whole album was the 'picture'.
But a bigger problem was the ease of coping & downloading songs for free.
In the end, the record companies & artists caved because .99 was better than nothing!
SNIP

While I agree with your summation of the retail music world offered by iTunes, my experience (albeit maybe compartmentalized to the people I see and know?) is that a lot - if not most - younger folks still steal their music. My daughter and her friends NEVER buy music off of iTunes or any other paid distribution point - they buy videos, movies and TV shows, yes, but never music. They simply RIP the audio to MP3's from YouTube videos using any one of a number of online sourcing websites. And... they don't care about the quality - only that it is free.

What you're outlining is different than Apple saying "we'll let you set the price, but if others sell lower we want the right to price lower as well". The publishers deciding to then push Amazon to the same agency model may be an issue, but Apple asking for the right to lower pricing to compete shouldn't have been.

would your analysis be different if the outcome, the publishers pushing the same model on the other sellers, was inevitable given Apple's actions?

What if Apple openly encouraged it?

What if it were merely the one most likely outcome, and Apple was passive?

The logic the government appears to be using here is very twisted. Frankly Apple did the right thing in pulling the rug out from under Amazon and their predatory practices.

The only way of that I know of to deal with this is to elect people that have a clue as to business and sustainablity. As we have it now we have a government that is corrupt with ignorance as far as understanding the needs of business.

Quote:

Originally Posted by Maestro64

This is the point most people do not realize what Amazon did to Boarders and now putting the squeeze on Barns and Noble, plus all the mom and pop book stores. So it okay for one company to to us VC money to give away product and almost wipe out ever competitor but god forbid a company comes along and changes the model so everyone can make money.

The government position here boggles the mind. Especially after watch numerous local book sellers go out of business. I really have to believe it is a combination of a few things, these being corruption, ignorance and blindness. Frankly from what I've see over the last couple of years the issue is more a case of #2, the people in office are just plain ignorant.

Quote:

There has to more to this, since the government can not be saying it is illegal for a seller of a product to set the selling price they want. If it too high people will stop buying that is how the systems works.

It does seem strange. Further there are so many publishers in this country that alternatives are easy to come by.

Quote:

I personally think the government does not like when one company has too much power, and trust me the government will win some how even if their originally reason is not valid they will do things to apple to force them to change. They did it Microsoft that is why M$ is a mess today, the government tied their hands.

As to my three issues above, corruption is possible the most valuable one to the likes of Amazon. You only need to lube a few hands to create a travsity like this one. In the end I really don't believe we have that many truly corrupt reps in Washington, but it only takes a few. The bigger problem is just the plain ignorant often populated by extremist from the left and right.

You're not quite correct. This assumption is flawed: "All other stores must use the price from the iBookStore and never offer it for less"

There is a very important distinction here. Apple did NOT ask the publishers to set a price for other stores nor did they make a demand that they never sell it for less, the ONLY thing they asked was permission to match any price that undercut the agreed upon agency price. This very clearly puts the responsibility on the publishers as to what terms and conditions they decide to offer other retailers. This is a clearcut case of the publishers being at fault, but Apple negotiating in good faith and within the law.

Actually, Apple is accused of colluding with publishers to raise e-book prices. It's not about the mechanisms they used to do that, agency pricing and most favored nation clause, which are generally perfectly legal.

Many people seem to not comprehend the issue. The issue is not the agency model (setting their "own price").

The issue is Apple's condition that no one else ever sell it for less than Apple. This eliminates competition by definition. All other stores must use the price from the iBookStore and never offer it for less. This is quite literally price fixing. Price fixing is most definitely illegal.

I don't know the exact language of the discussions between Apple and publishers (and I suspect nobody here does either), but if this is relatively accurate:

"...But we also asked for a guarantee that if anybody else is selling the books cheaper than we are, then we can sell them at the lower price too."

The translation is:

"If Amazon gets to sell it for a lower price, then so do we."

That's hardly Apple dictating a minimum price. That's "we can sell it as cheap as anyone else decides to", not "nobody can sell it cheaper than we decide to". Again, assuming the language from the original post is accurate (or at least representative), then that's the opposite of Apple stipulating the minimum price.

The other wording suggests that regardless of selling price, Apple's agreement meant they would still get a cut of the sale price, not the sale price less a fixed wholesale price (which would be negative if the going minimum price was under wholesale) - so Apple wouldn't have to take a loss if they had to lower prices to compete.

The other part of the issue is that after that, the publishers did this:

"...went to Amazon and said, 'You're going to sign an agency contract or we're not going to give you the books."

Which, translated, is this:

"We finally have another viable customer willing to buy our goods on the terms we want, and we can make better profits if we <don't> sell to you on the terms you want, so from now on you can buy books from us on our terms, or not at all - your choice."

That's the publisher(s), not Apple. This is why there <may> be a case against the publisher(s), but frankly, I don't know enough about the legal details to make that assertion. However here's my [uneducated] take:

Apple's agreement with the publisher(s) was that Apple would try to sell at MSRP, but if other retailers pushed the price lower, Apple would sell lower too, and Apple would buy the "books" for 70% of whatever they sold for, not an up-front fixed wholesale cost. I don't see how that implicates Apple as fixing a price, when the language suggests they were willing to go as low as the rest of the retailers in the market would go. Granted, it gives the publisher leverage to try to force other retails to try to sell at MSRP, but that's the publishers, not Apple.

And what I'd like to know is; with Amazon was holding a virtual monopoly on the e-book market, what made it OK for them to be using that dominance position to try to dictate what the publishers could sell to them at? Taking a loss on product is only a viable business strategy if you can monetize on that through secondary sales ("loss leader"). The loss on the e-book reader was justified by saying it was the loss leader for e-books themselves. Amazon was effectively using a position of monopoly to try to manipulate the publisher selling price - taking a loss to deliberately depress the market for the purposes of controlling it. Unless they [Amazon] were planning to raise book prices once they'd decided they'd locked-in enough consumers in their e-book ecosystem, I only see two other possible outcomes from that strategy: 1) the publishers start selling to Amazon at a lower price (proving the monopoly control theory correct), or 2) Amazon hits the wall on funds to subsidize the loss on e-books and has to raise the price (or stop selling them altogether), in which case they could point a finger at the publisher(s) and say to the e-book consumers (of which they have the monopoly on) "we'd like to sell these to you a nice low prices, but the big mean publishers won't let poor little us do that" - manipulating consumer perception to squeeze the publishers (again, asserting an effective control over the market price). That effect could be negated by another reseller taking up the slack, but with Amazon controlling something like 90% of e-book sales and even the big book chains not being able to gain significant traction there, who would that realistically be?

You're not quite correct. This assumption is flawed: "All other stores must use the price from the iBookStore and never offer it for less"

There is a very important distinction here. Apple did NOT ask the publishers to set a price for other stores nor did they make a demand that they never sell it for less, the ONLY thing they asked was permission to match any price that undercut the agreed upon agency price. This very clearly puts the responsibility on the publishers as to what terms and conditions they decide to offer other retailers. This is a clearcut case of the publishers being at fault, but Apple negotiating in good faith and within the law.

Thanks for that. That's the distinction that I didn't quite understand.

If I understand you correctly then this means that Apple only asked, the publishers complied.

The publishers therefore knew better (and why most if not all have negotiated a settlement) but went along with the agency model anyway. Apple didn't hold a gun to their heads.

While I agree with your summation of the retail music world offered by iTunes, my experience (albeit maybe compartmentalized to the people I see and know?) is that a lot - if not most - younger folks still steal their music. My daughter and her friends NEVER buy music off of iTunes or any other paid distribution point - they buy videos, movies and TV shows, yes, but never music. They simply RIP the audio to MP3's from YouTube videos using any one of a number of online sourcing websites. And... they don't care about the quality - only that it is free.

The problem is that you tolerate this and frankly that is pathetic. It would do you well to show a little backbone and try to instill a a little morality in your daughter before her thieving turns to shop lifting or worst. Just because it is easy doesn't make it right.

The problem is that you tolerate this and frankly that is pathetic. It would do you well to show a little backbone and try to instill a a little morality in your daughter before her thieving turns to shop lifting or worst. Just because it is easy doesn't make it right.

With the agency model, essentially its a monopoly by the publisher. You want James Pattersons last literary masaterpiece, its this price. Essentially its a that price +- the 30% the retailers can play with. And you can only get it from me(the publisher)

With the other model, the retail can flood the market(nokia 900 anyone?) and sell at a loss. Driving out competitors.

In both models the publisher gets paid. Its the latter that the publisher has a 'fear' that the Amazon types will drive out other competitors and dictate price back to the publishers.

But this is not the real world... far as I can tell there are lots of retailers... for now.

Pick your poison I guess

Hokey religions and ancient weapons are no match for a good blaster by your side, kid.

Not correct as I understand it. Of course Apple had the right to match Amazon's pricing or not before the agency model was put into effect. The change now is that Amazon cannot sell for less that Apple, which is being construed as price-fixing.

According to the DoJ, Apple conspired with the 5 largest publishers to make sure Amazon could not buy books from them unless Amazon agreed that Apple's prices were the minimum acceptable.

That's the issue, not that Apple wanted the right to match Amazon pricing. You have it backwards.

You have it backwards. Apple never said that their prices dictate what others could minimally sell at, as you claim, all they requested is that if another vendors sells it for less they would sell it for no more than that price on iBookstore.

Show me proof where Apple said that iBookstore prices are lowest and Amazon could not set the prices lower.

This bot has been removed from circulation due to a malfunctioning morality chip.

Publishers also worried that retailers such as Barnes & Noble Inc. would be unable to compete with Amazon's steep discounting, leaving just one big buyer able to dictate prices in the industry.

This isn't...

In essence, they feared suffering the same fate as record companies at Apple's hands, when the computer maker's iTunes service became the dominant player by selling songs for 99 cents.

Apple isn't selling an album for 99¢, they are selling a single song with a different bitrate which makes the content inherently different. Furthermore, remember all the bitching about how the iTMS was more expensive than buying a CD? Finally, when Amazon and Wal-Mart started selling songs they sold them for less money than Apple so you can't say that Apple had the same model as Amazon (who also got a higher bit rate and DRM-free songs before Apple, thus making their product 3x as attractive).

This bot has been removed from circulation due to a malfunctioning morality chip.

That's about $9 more than what I'd pay for brand new kitty litter lining. How can I use a Stossel book to keep the cat pee and poop from getting on the plastic tray at that price?

"Stossel, a self-described skeptic, he has dismantled society's sacred cows with unerring common sense. Now he debunks the most sacred of them all: our intuition and belief that government can solve our problems."

Wow. Stossel is man enough to do exactly what Oil Companies, the NRA, and finger wagging Arizona governors have done. He joins the ranks of every asshole on TV in showing how tough they can be talking crap about big G. Apparently, he's a skeptic about Democratic elections of representatives. Perhaps he's suggesting massive bake sales and pot lucks at churches, coupled with a meeting of elders as a way for people to organize and build things like electric grids and bridges -- who can say what goes on in the mind of a champion?

Stossel gets the endorsement of NYT and Fox news commentator -- it really doesn't matter which one -- as they are ALL glorious, brave, mavericks who dismantle society's sacred cows; like Teacher's Unions, wages, benefits, promoting 401ks that lose half their value in an "oops year" versus Pensions, and of course, making fun of Urban hi-jinx.

do I hate and loath John Stossel? Yes I do.

Is Apple charging too much for their Fox News friendly kitty liner for protofascists who are working to undermine this country? No. No they are not. I'd prefer it to be $30 and self destruct after 10 hours.

OK, but for actual books of value -- I think a price of $3.99 is about right. Let's get real; there is no issue with scale nor printing nor shipping. The cost to deliver is only a few pennies more than a song track. Giving the author $1.20 would be way above the average contract, but 66% of that would be awesome as well.

Obviously, Apple was trying to avoid the mighty fist of the Justice Department by being evil, since apparently, them being the only one raising wages and worker conditions in China was pissing off everybody quietly getting their microwaves built for $.99.

the best part about the interwebs is that when some socialist liberal know-nothing spouts off on an anti capitalist rant that is not only off topic but intellectually retarded, they can now be met head-on, revealed for the neo communist they are, and refuted with the same simplicity reserved for most belligerent third graders.

The lawsuit is because they allegedly colluded to raise e-book prices during negotiation, not the mechanisms (agency model, most favored nation status) in the contract itself.

Oh, yes, absolutely... Apple could still be guilty of colluding to raise e-book prices. Just being a part of the negotiations adds Apple to the list; whether or not you could ultimately change the outcome (Apple couldn't make the publishers change to the Agency model) doesn't exclude you from the alleged crime that was committed.

I know many people here are Apple fans...but look at this objectively.

Since Apple's price fixing with publishers (and make no mistake, that's what the "minimum book price" is exactly), the cost of new novels for eBooks has gone up from $9.99 to nearly $20. It is literally cheaper for me to go to the local brick & mortar store and buy a brand new hardcover than to download an eBook.

There's nothing wrong with Apple's agency model. The problem is with them mandating a minimum (high) book price that no one can undercut. That, quite literally, eliminates competition.

If Google or Amazon did this, the lot of you would be screaming bloody murder. Time for some objectivity, no?

OK, being objective - factor in Amazon selling books at a loss. That could qualify as unfair business practices - an attempt to knock other companies out of the e-book market and obtain a monopoly position for themselves - then they control the prices.

The US government is currently battling with the Chinese over the Chinese selling solar panels at below cost in attempt to take control of the market and drive competition out.

So it works both ways. Competition is needed to keep markets open and fair.

Funny thing is this has nothing to do with Amazon right now, why bring it up? It may in the future, but this is about Apple and Apple's collusion with publishers.

Seriously? Nothing to do with Amazon? Did you miss all the references to Amazon in the statements from virtually <everyone> involved with this issue? It's Amazon's dominance in e-book retailing that made this whole thing an issue in the first place. Here's an open letter from the CEO of one of the involved book publishers. Note the explicit to Amazon (emphasis mine):

Quote:

After careful consideration, we came to the conclusion that the terms could have allowed Amazon to recover the monopoly position it had been building before our switch to the agency model. We also felt the settlement the DOJ wanted to impose would have a very negative and long term impact on those who sell books for a living, from the largest chain stores to the smallest independents.

the best part about the interwebs is that when some socialist liberal know-nothing spouts off on an anti capitalist rant that is not only off topic but intellectually retarded, they can now be met head-on, revealed for the neo communist they are, and refuted with the same simplicity reserved for most belligerent third graders.

LOL.

Or they can NOT get rebutted, by someone who fancies himself a creative writer!

You could have come back with some off-topic citations, or even facts -- but you chose to rant on, and assume anyone who has a problem with shills like Stossel, is a Communist.

The more I listen to the pro-capitalist dystopians, the more they make Communism sound good -- but you've only convinced me so far that Democratic Socialism is probably a good idea to try.

>> I'll spread my sweet ideas about liberty and the fifth columnists who are trying to ruin this nation wherever I can -- until YOUR FRIENDS crush dissent on the internet. After that I suppose I'll have to write my rants on bits of paper and tie them to birds.

Thank GOD you people gave us the Internet -- I thought it was Al Gore and $500 Billion in taxpayer funds to extend a DARPA project.

Oh, yes, absolutely... Apple could still be guilty of allegedly colluding to raise e-book prices. Just being a part of the negotiations adds Apple to the list; whether you could ultimately change the outcome doesn't exclude you from the alleged crime that was committed.

Sorry, my sarc-o-meter can't figure out if you're serious or not here, but you can't be guilty of allegedly colluding, only actually colluding. Well, I guess you can be guilty of allegedly colluding but that's not all that useful.

I have no idea if there was actual collusion (though Steve Jobs' quote from the article sort of implies that there was something going on) or not. I just wanted to point out that the contract itself is perfectly legal and its mechanisms aren't what the DoJ cares about.

Sorry, my sarc-o-meter can't figure out if you're serious or not here, but you can't be guilty of allegedly colluding, only actually colluding. Well, I guess you can be guilty of allegedly colluding but that's not all that useful.

I have no idea if there was actual collusion (though Steve Jobs' quote from the article sort of implies that there was something going on) or not. I just wanted to point out that the contract itself is perfectly legal and its mechanisms aren't what the DoJ cares about.

Oh... you are right. Sorry. I had several thoughts running through my head as I wrote that.

Fair enough - but should consumers not be able to have a choice in the matter? Each book store has their own benefits and drawbacks. Perhaps some people want their entire library via Nook so they can "lend" with their friends. Perhaps this is worth more than than the extra $0.50 (for example) discount they would have via Amazon

Fair enough - but should consumers not be able to have a choice in the matter? Each book store has their own benefits and drawbacks. Perhaps some people want their entire library via Nook so they can "lend" with their friends. Perhaps this is worth more than than the extra $0.50 (for example) discount they would have via Amazon

Fair enough. Let Amazon have its way and there won't be a Nook library in 3 years.

You have it backwards. Apple never said that their prices dictate what others could minimally sell at, as you claim, all they requested is that if another vendors sells it for less they would sell it for no more than that price on iBookstore.

Show me proof where Apple said that iBookstore prices are lowest and Amazon could not set the prices lower.

Amazon cannot sell their books supplied by those 5 publisher's for less than Apple can. Period. Apple may of course choose to sell for more than the publishers set price, not very likely in most cases IMHO.

What the new model is doing is restricting competition. Rather than Apple needing to decide if they wish to match Amazon's low pricing (or any other competitor for that matter), they've removed that from the equation. Assuming Apple uses the publisher's price, they are guaranteed by those five publishers that Amazon cannot undercut them. Apple has a guaranteed profit of x% and no worries that Amazon can take business from them based on price. Therefor no competitive pricing.

Then top that off with the DoJ's assertion that Apple met with each of these publishers, proposed the idea guaranteeing Apple a set profit and the resultant restriction on Amazon using price to compete and it's pretty easy to see why the DoJ has a problem with the plan.

I don't know the exact language of the discussions between Apple and publishers (and I suspect nobody here does either), but if this is relatively accurate:

"...But we also asked for a guarantee that if anybody else is selling the books cheaper than we are, then we can sell them at the lower price too."

The translation is:

"If Amazon gets to sell it for a lower price, then so do we."

That's hardly Apple dictating a minimum price. That's "we can sell it as cheap as anyone else decides to", not "nobody can sell it cheaper than we decide to". Again, assuming the language from the original post is accurate (or at least representative), then that's the opposite of Apple stipulating the minimum price.

The problem is that none of us know the deals that Apple signed or the content of the discussions.

I can see only one possible way that what people are alleging could create an antitrust problem.

Let's say that there's an eBook that Apple sells on its store for $20 (which means that Apple pays the publisher $14 and keeps $6). Let's say that the publisher charges everyone the same amount for the eBook - $14.

Now, let's say that Amazon wants to sell that book for $10. Amazon may be willing to take the loss (as they have done on a number of items), but if your interpretation of the events is correct, then Apple could also sell it for $10 - and keep three dollars, giving the publisher $7. Essentially, this type of arrangement would take away the right of a reseller to sell an item at a lower margin than 30% (or even at a loss). I could see that being a potential problem, although I'm not sure it's illegal. I'm absolutely certain that it's not illegal for Apple to demand the same or better wholesale price as everyone else, but it gets more complicated when they start dictating retail prices - since the publisher has no direct control over retail prices in the Amazon model.

Again, none of us knows what the contracts say, so it's really not worth speculating at this point.

"I'm way over my head when it comes to technical issues like this"Gatorguy 5/31/13

Many people seem to not comprehend the issue. The issue is not the agency model (setting their "own price").

The issue is Apple's condition that no one else ever sell it for less than Apple. This eliminates competition by definition. All other stores must use the price from the iBookStore and never offer it for less. This is quite literally price fixing. Price fixing is most definitely illegal.

Price fixing is illegal among competitors. Macmillan and Apple are not competing, but have an agreement under which Apple sells books at a price set by MacMillan -- exactly as Apple sells We Are Young, or Angry Birds Space, at prices set by the originators.

If the publishers are requiring Amazon to match Apple's agency model then they are telling everyone what prices they can sell the ebooks at. No more price competition. I'm not surprised that the publishers like this model, but it seems to me to be exactly what anti-trust legislation was aimed at preventing.

Amazon cannot sell their books supplied by those 5 publisher's for less than Apple can. Period. Apple may of course choose to sell for more than the publishers set price, not very likely in most cases IMHO.

What the new model is doing is restricting competition. Rather than Apple needing to decide if they wish to match Amazon's low pricing (or any other competitor for that matter), they've removed that from the equation. Assuming Apple uses the publisher's price, they are guaranteed by those five publishers that Amazon cannot undercut them. Apple has a guaranteed profit of x% and no worries that Amazon can take business from them based on price. Therefor no competitive pricing.

It's really easy to see why the DoJ sees issues with the plan.

No. The DoJ has issues with the broad collusion during the contract negotiation. The contract itself is perfectly sound. In fact, according to the WSJ, Random House did not originally agree to the contract and thus is not a defendant in the case, however they signed the same contract last year. If all of the negotiations had been performed independently, in good faith, then all the companies would have the agency model but no lawsuit, like Random House.

Fair enough. Let Amazon have its way and there won't be a Nook library in 3 years.

We can disagree on that point. I believe each major vendor will be just fine in 3 years. Amazon is by no means the monopoly nor single choice in ebooks. I believe that when there is competition, the consumers will be the ultimate winners.

I know many people here are Apple fans...but look at this objectively.

Since Apple's price fixing with publishers (and make no mistake, that's what the "minimum book price" is exactly), the cost of new novels for eBooks has gone up from $9.99 to nearly $20. It is literally cheaper for me to go to the local brick & mortar store and buy a brand new hardcover than to download an eBook.

There's nothing wrong with Apple's agency model. The problem is with them mandating a minimum (high) book price that no one can undercut. That, quite literally, eliminates competition.

If Google or Amazon did this, the lot of you would be screaming bloody murder. Time for some objectivity, no?

just scanned through the DOJ's filing. It seems like the big 5 publishers and Apple were colluding together to force agency model on retailers/smaller publishers and set the price level. (they are some juicy stuff about how the publishers responded to Amazon's refusal to carry McMillans' ebooks & hardcopy).

No. The DoJ has issues with the broad collusion during the contract negotiation. The contract itself is perfectly sound. In fact, according to the WSJ, Random House did not originally agree to the contract and thus is not a defendant in the case, however they signed the same contract last year. If all of the negotiations had been performed independently, in good faith, then all the companies would have the agency model but no lawsuit, like Random House.

Your were apparently replying before noting the edit made a minute or so later.

This is what you missed:
"Then top that off with the DoJ's assertion that Apple met with each of these publishers, proposed the idea guaranteeing Apple a set profit and the resultant restriction on Amazon using price to compete and it's pretty easy to see why the DoJ has a problem with the plan."

Publishers also worried that retailers such as Barnes & Noble Inc. would be unable to compete with Amazon's steep discounting, leaving just one big buyer able to dictate prices in the industry.

This isn't...

In essence, they feared suffering the same fate as record companies at Apple's hands, when the computer maker's iTunes service became the dominant player by selling songs for 99 cents.

Apple isn't selling an album for 99¢, they are selling a single song with a different bitrate which makes the content inherently different. Furthermore, remember all the bitching about how the iTMS was more expensive than buying a CD? Finally, when Amazon and Wal-Mart started selling songs they sold them for less money than Apple so you can't say that Apple had the same model as Amazon (who also got a higher bit rate and DRM-free songs before Apple, thus making their product 3x as attractive).

" Government lawyers have questioned how competition could have increased when prices went up. Amazon declined to comment."

The above was by far my favorite. If accurate, how ignorant are those Gov lawyers? Amazon sells ebooks at a loss then making up the difference on other stuff. Now that there's another player in the eBook game using a different platform, What has been the impact on the price of the Kindle? What has been the impact of the prices of that other stuff Amazon was hiking up? What improvements have been done on the Amazon reader/tablet line? How has the consumer benefitted? Amazon has had to adapt and improve.

It's so odd that the DoJ seems to consider a book only as the paper in a binding and not the content. I guess this is why the model of subsidizing eBooks with higher prices on other stuffs went unnoticed. That was certainly an inhibiter on new competition entering the eBook section of the market. It's the content of the book that is under copyright - produced, distributed, sold and protected. Is the content somehow worth less based on the medium or delivery method? The market for that content is the same whether it is a brick-n-motor selling it on paper or Internet sales of it on paper or digital download to a proprietary platform.

just scanned through the DOJ's filing. It seems like the big 5 publishers and Apple were colluding together to force agency model on retailers/smaller publishers and set the price level.

Yes. This is key. There's nothing illegal about the agency model or the most favored nation clause, it's how the negotiation was done (allegedly). This is why Random House, which agreed to exactly the same terms, but not during the same negotitation, isn't being sued.